1. What do we mean by outsourcing?2. What do we mean by offshoring?3. What services might companies ‘outsource’ or ‘offshore’4. What reasons are there for outsourcing?5. What business reasons are there for offshoring?6. What customer/business issues arise with offshoring?7. What do we mean by rightshoring?8. What social and ethical issues arise with offshoring?9. What are the overall benefits and limitations of offshoring?10. There are a number of different ways in which organisations can obtain external services from suppliers or service companies. State these 3 ways.
11. What are the company benefits and drawbacks of buying hardware, software and equipment?12. What are the company benefits and drawbacks of contracting people, work space and equipment?13. What are the company benefits and drawbacks of leasing software, communication links and equipment?14. What 6 internal resources need to be managed by organisations?15. What issues should be considered with regards to People (as a resource)?16. What issues should be considered with regards to Hardware (as a resource)?17. What issues should be considered with regards to Software (as a resource)?18. What issues should be considered with regards to Communication (as a resource)?19. What issues should be considered with regards to Consumables (as a resource)?20. What issues should be considered with regards to Facilities and Power (as resources)?
Transfer of responsibility for a particular aspect of the business to an external agency (third party) The organisation does not have ownership of this agency.
When an organisation purchases services in one country to be provided in a different country. The organisation has ownership of the services.
Outsource ◦ Payroll ◦ Invoicing ◦ Accounting ◦ Bulk printing ◦ Backup and Recovery ◦ ICT Support Offshoring ◦ Telephone call centres ◦ Customer support ◦ Storage ◦ Programming ◦ Website and internet development
Allows the company to concentrate on delivering a good service to their customers and not worry about other services. Improved quality ◦ Specialist outsourced companies provide high quality services Staffing issues ◦ The service company would have access to a range of staff and can allocate the work to Capacity Management ◦ The level of service needed by the organisation may vary from month to month depending on how much work there is (haven’t had to employ staff who may not be required) Cost Benefits ◦ Should reduce overall costs to organisation (no wages, no national insurance payouts etc.) Economies of Scale ◦ E.g. Printing in bulk is cheaper than printing one offs so a company might outsource their printing Reduced Development Time ◦ Buying in additional support means that an organisation can develop products faster Standardised Business Processes ◦ Allows a range of businesses access to services previously only available to large corporations Improved Risk Management ◦ Using specialists for advise e.g. on backup and recovery, may reduce the risk of data loss
Business Standards ◦ A service level agreement which specifies the nature, scope and quality of the service should be provided.Customers Can be hostile to outsourcing e.g. oversees customer support ◦ Language barriers ◦ Long waiting times ◦ Increased stress ◦ Lack of local knowledge ◦ Under trained employees relying on scripts from knowledge based systems
Using offshore centres for routine services e.g. routine call centres THEN UK based ones for more complex enquiries, that are likely to involve discussion
Social Against ◦ Impact on UK jobs ◦ Decreased rates of pay For ◦ Improved living standards across the world ◦ Global markets become largerEthical For ◦ Valued local employment Against ◦ Exploitation ◦ Poor working conditions ◦ Long hours for low pay
Benefits ◦ Labour and facilities may be cheaper abroad, resulting in cost savings ◦ Specialist skills more readily available, again at lower cost ◦ Some countries offer financial incentives to encourage new business ◦ Jobs and investment may be extremely valuable to the local economy ◦ Assists the global economy by providing work to less wealthy areas of the world Limitations ◦ Language and cultural differences may cause difficulties ◦ Communications costs may be higher ◦ Legislation may be different abroad so it is important rights are not breached ◦ Security risks may be increased as the organisation moves away from local control
Specific period of time for an agreed cost LEASING FACILITIES Disaster manager CONTRACTING strategy: SOFTWARE - Office space EQUIPMENT EQUIPMENTSpecific period Once contract COMMUNI-of time for an paid the goods CATIONSagreed cost SERVICE are owned / STAFF A network NEVER owned but: manager to - initial investment is low cover maternity - usually includes support, upgrades etc. - Paid more - No benefits Data Warehouse BUYING to backup data Buying Equipment or Hardware can be done through contracting SOFTWARE Once bought you own: -High level of initial investment HARDWARE EQUIPMENT - Items bought are assets of the company - support & maintenance are extra costs
What is Buying? ◦ When payments are received for ownership of a product or service What is contracting? ◦ Making an agreement with a supplier to provide a specific service for a specific period of time at an agreed cost ◦ An agreement between supplier and customer for purchasing of equipment with costs spread over time. Once full payment is reached, goods are owned by the customer. What is leasing? ◦ Making an agreement with a supplier for the rent of something for a specific period of time at an agreed cost. However, whatever is leased is never owned
Benefits ◦ Initial investment over time will work out less than contracting or leasing (e.g. no interest) ◦ The items purchased become assets of the company Limitations ◦ High level of initial investment ◦ Limited resale value ◦ Requires arrangements for support, servicing and maintenance ◦ If money has to be borrowed to finance initial costs, interest charges need to be considered
Benefits ◦ Staff can be contracted to support short term projects (paid more but not entitled to benefits) ◦ Companies can contract space and equipment for the same reason (short term project) ◦ Can be an important part of a company’s disaster management strategy e.g. contracting hot sites ◦ Spreading costs over time so no high initial investment Limitations ◦ Potential of being over reliant on the contracting of work space ◦ If services are outsourced there is a lack of control ◦ Interest rates to consider
Benefits ◦ Initial investment not as high as buying ◦ Usually additional support services included as well as regular upgrades ◦ Makes financial planning easier (no single substantial investments needed to keep abreast of new releases) ◦ Many companies lease dedicated communication lines to establish their own WAN More secure connection than a shared line Better data transfer speeds Limitations ◦ Company does not own what is leased e.g. hardware/software (unable to modify) ◦ Overall cost higher but spread out
People Hardware Software Communication Consumables Facilities & Power
HR will be largely responsible for the management of the people ◦ New appointments ◦ Staff development ◦ Pastoral care ◦ Disciplinary procedures Contracts outlining ◦ job description ◦ Responsibility ◦ Chain of command ◦ Disciplinary measures Policies ◦ Impact on security and acceptable use policies (and any other policies/procedures employee must follow) Training and Staff Development ◦ Major impact on staff loyalty and retention HR Management software can be used to support this
Procurement policies Asset Registers ◦ Database to store details of each piece of hardware, location and technical specification ◦ Log faults, repairs and updates ◦ Helps with budgeting Network operating system can monitor hardware Backup power supplies
Asset Management software ◦ Records software installed on each machine License Management software ◦ Monitors software installed, versions and suitable licenses etc. ◦ Important tool for compliance with Copyright and Patents Act Network installations / Client workstation installations Cloning software to push out software installations from the server Anti Virus Applications
Network management software ◦ Creates reports on network traffic Filtering software ◦ Restrict access to certain websites Conserve bandwidth Block sites that are inappropriate Setting up a proxy server ◦ Protects internal communication system Sits between users and internet Only IP address visible to web server is that of the proxy (less use to hackers than individual machine IPs) Proxy caches common web pages also making them quicker to load
Network management software can control which users have access to which peripherals e.g. printers, scanners etc. Print accounting software can control amount of printing done Ordering and distribution of consumables must also be managed (audit log) A support desk might be used to request supplies A good relationship with suppliers helps ease purchasing and control stock
Facilities ◦ Owned or leased ◦ Health and safety legislation will impact: Design of room (AC, Cabling, spacing etc.) Furniture (adjustable swivel chairs etc.) Equipment (adjustable monitors etc.) Power ◦ Procurement policy will investigate consideration of suitable ‘green computing’ ◦ Training and Acceptable use policy should ensure that staff are aware of what they can do to reduce energy consumption (e.g. switch off machines) ◦ System settings can be configured to enable power saving options (sleep)